The Impact of GMT on Multinational Businesses in Thailand

The Global Minimum Tax (GMT) is a global corporate income tax reform initiated by the Organization for Economic Co-operation and Development (OECD) to address profit shifting to low-tax jurisdictions and reduce tax competition among countries.

Implementation of GMT in Thailand

Thailand enforces the GMT framework, requiring multinational corporations (MNCs) with global annual revenues exceeding €750 million (approx. THB 28 billion) to pay a minimum corporate income tax rate of 15%, aligning with the OECD's Base Erosion and Profit Shifting (BEPS) framework.

BOI Incentive Considerations:

Although Thailand's standard corporate income tax rate is 20%, many multinational firms benefit from Board of Investment (BOI) tax exemptions or reductions. Under GMT, if a company's effective tax rate falls below 15%, top-up taxes may be levied by their home country or other operating jurisdictions.

Tax Collection Mechanisms Under GMT

Income Inclusion Rule (IIR)

If a multinational company's effective tax rate in Thailand is under 15%, the parent company's home jurisdiction can collect the tax rate difference.

Undertaxed Profits Rule (UTPR)

If the home country does not enforce top-up tax, other secondary countries where the MNC operates may impose additional taxes instead.

QDMTT Option

Thailand adopts the Qualified Domestic Minimum Top-Up Tax (QDMTT) to collect domestic top-up taxes directly before foreign nations do.

Impact on Foreign Direct Investment (FDI)

While GMT reduces tax-based incentive advantages, Thailand remains a premier destination for foreign investors due to non-tax advantages:

Strategic geographic location in Southeast Asia
Strong manufacturing, logistics, and export infrastructure
Skilled workforce and well-developed industrial estates

Income Taxation for Foreigners in Thailand

Taxpayer Status	Physical Presence Criteria	Tax Liabilities
Tax Resident	180 days or more in a calendar year	Subject to tax on Thai-sourced income and assessable foreign-sourced income.
Non-Resident	Less than 180 days in a calendar year	Taxed solely on income derived from sources within Thailand.

Deductions & Allowances for Foreigners

Foreign residents are eligible for standard personal income tax deductions in Thailand:

Personal Deduction: THB 60,000 per year
Spouse Allowance: THB 60,000 (legally married, spouse with no income)
Child Allowance: THB 30,000 per child (up to a maximum of 3 children)
Investment Deductions: Eligible contributions to provident funds, Retirement Mutual Funds (RMFs), and qualify life insurance premiums.

Tax Filing Deadlines

Foreigners earning assessable income in Thailand must file Personal Income Tax Returns (Forms PND 90 or PND 91) with the Thai Revenue Department by March 31 of the following year for income earned during the previous tax year.